Avista files reduction in residential rates for natural gas service

About 96,000 customers in Oregon could see a 5.5 percent reduction in their natural gas rates on Nov. 1 if the state approves the company's filings made Thursday.

About 96,000 customers in Oregon could see a 5.5 percent reduction in their natural gas rates on Nov. 1 if the state approves the company's filings made Thursday.

If the requests are approved, Avista residential customers using an average 48 therms a month could expect their bills to decrease by $3.27, or 5.6 percent, for a revised monthly bill of $54.73.

Avista's natural gas revenues would decrease by $5.1 million, or 5.5 percent. The company does not mark up the cost of natural gas purchased to meet customer needs, so there is no impact on company earnings.

The filings made Thursday are required each year to balance the actual cost of wholesale natural gas purchased by Avista to serve customers with the amount included in rates. These costs not only include natural gas commodity costs but also the cost to transport natural gas on interstate pipelines to Avista's local distribution system. The primary driver for the company's requested decrease is a reduction in the interstate pipeline transportation costs, which more than offset the rising wholesale natural gas prices seen in 2013.

About 55 percent of an Avista natural gas customer's bill is the combined costs of purchasing natural gas on the wholesale market and transporting it to Avista's system. These costs fluctuate based on market prices, and Avista does not mark up these costs. The remaining 45 percent covers the cost of delivering the natural gas to Avista customers.

On Aug. 15, Avista filed a general rate request to increase natural gas rates by 9.8 percent to recover investments made in the company's delivery system — the 45 percent of a customer's bill. The PUC has up to 10 months to review the request.